Marraige questions

The Corinthian

Wompa1 wrote: »

Really? I didn't know that. Nuts!! So really if you are worried about being taken to the cleaner you shouldn't live with a lady for 5 years either...

A little bit more complicated than that.

To begin with, the five year deadline becomes two once there's a baby present.

Secondly there is the option of a cohabitants’ agreement - a bit like a prenup - that can be drawn up and signed by both parties (consult a solicitor for further details). However, this is by no means ironclad as:

"The court may vary or set aside a cohabitants’ agreement in exceptional circumstances, where its enforceability would cause serious injustice."

And what 'serious injustice' constitutes would mean is up to the mercy of our famously consistent judges - one possible scenario would be an agreement signed before children were present and a judge may consider the inclusion of children to the mix to change everything, including the validity of any agreement.

Tombo2001 wrote: »

when I realised that if I died, that all my assets would go into an escrow account that the kids couldnt touch before they were 18......that focussed my mind.

Why didn't you write a will?

Tombo2001

The Corinthian wrote: »

Why didn't you write a will?

If I wrote a will, and wasnt married, then my partner would have paid 33% inheritance tax.

I left her the house, she would have owed cash 33% of the value of the house to the revenue commisioners.

The Corinthian

Tombo2001 wrote: »

If I wrote a will, and wasnt married, then my partner would have paid 33% inheritance tax.

Fair enough (although there are ways around this).

Nonetheless, my question was based on your concern that all your assets would go into an escrow account that your kids couldnt touch before they were 18 - you mentioned nothing about your partner - and married or not they would be treated the same in terms of inheritance tax.

wallycharlo

The Corinthian wrote: »

Fair enough (although there are ways around this).

Not trying to drag things off-topic. but can you expand a little on that? Guess it's still relevant to the OP anyway ...

The Corinthian

wallycharlo wrote: »

Not trying to drag things off-topic. but can you expand a little on that? Guess it's still relevant to the OP anyway ...

I can't really expand all that much on it, because I've never had cause to need it, however I doubt if anyone would be surprised if they were told that there are various means of avoiding inheritance tax and I have been told by solicitors/accountants that if need be, there are options in this regard.

If I had the same concerns as Tombo, then I'd probably investigate this area first, before looking at marriage. Honestly, when people use such reasons to explain why they got married, I get the impression that they're just excuses and ultimately they wanted to get married - which, don't get me wrong, is fine.

Pawwed Rig

I can't think of any as common law partner is not covered under the inheritance legislation. There is a fairly low exemption amount at the moment of €16,750 so anything above that will be taxed at 33%. Unless you are talking about becoming non resident but that would not work either.
If I think of anything I will get back on it.

pwurple

The Corinthian wrote: »

Fair enough (although there are ways around this).

Nonetheless, my question was based on your concern that all your assets would go into an escrow account that your kids couldnt touch before they were 18 - you mentioned nothing about your partner - and married or not they would be treated the same in terms of inheritance tax.

I don't follow this either. Married or not makes a big difference for inheritance law. One is taxed at a huge rate, the other not at all.

How do you get around it? I know you say it's an excuse, but really, a lot of people are completely unaware of the problems that not being married can cause with inheritance until it is in their face... I know a family with 5 children where the parents just didn't get around to getting married. When the man was killed in an accident, apart from the grief, they ended up in a financial mess. The house mortgage was in her name, so no life assurance for him. His income was now gone, but the expenses remained. he ran his own small business so no employer life cover either. And their savings were all in an account in his name only, so she would have to hand 33% of that over if she wanted to access it. She didn't even qualify for widows pension. They had drifted along not thinking about it, until it was far too late.

When you are young, you are invincible and none of that stuff seems important.

The Corinthian

Personally I find that people tend to procrastinate on dealing with issues, or when they do deal with them they tend not to think them through, their implications or possible consequences - look at all the people who can't afford their mortgages any more, often because they could only barely afford them during a boom economy and never considered how, just maybe, the boom might end.

I've never had to look into the whole spousal inheritance issue and only commented on what I've been told. Thing is I'd tend to believe that there are ways around it, because in other areas (which I will not discuss) I've found and availed of numerous loopholes.

Given this, in the example you gave, I'm sure even you can see a few things that the couple in question could have done to decrease the potential downside of one of them dying. No life cover? All their savings in his name? Com'on!

clairefontaine

Pawwed Rig wrote: »

I can't think of any as common law partner is not covered under the inheritance legislation. There is a fairly low exemption amount at the moment of €16,750 so anything above that will be taxed at 33%. Unless you are talking about becoming non resident but that would not work either.
If I think of anything I will get back on it.

I believe if they were residents of the home they are exempt from the tax.

http://www.revenue.ie/en/tax/cat/leaflets/cat10.html

Pawwed Rig

clairefontaine wrote: »

I believe if they were residents of the home they are exempt from the tax.

Well spotted . I thought that exemption only applied to relatives but I just looked it up and you are correct. Having said that there are a few conditions on it that everyone might not satisfy so I wouldn't be leaving it to chance. For example if there was no will then this would not apply or if the person who dies was still married to a third party this could also be contested.

The Corinthian

Pawwed Rig wrote: »

Having said that there are a few conditions on it that everyone might not satisfy so I wouldn't be leaving it to chance.

Then you don't leave it to chance - at least do your homework, employ a professional to make sure and not simply accept what you read on the Interweb. More and more this all reads like marriage is the choice of those too lazy to seek alternative solutions or simply looking for excuses to marry.

For example if there was no will then this would not apply or if the person who dies was still married to a third party this could also be contested.

Then draw up a will and if the person who dies was still married to a third party, isn't marriage to the new partner a bit moot? Get a divorce.

pwurple

The Corinthian wrote: »

Given this, in the example you gave, I'm sure even you can see a few things that the couple in question could have done to decrease the potential downside of one of them dying. No life cover? All their savings in his name? Com'on!

Oh absolutely, it was total head in the sand stuff. Zero financial cop on. People drift into these situations over time with no thought applied. Same applies with long-term relationships. I did it myself for ten years, fairly obliviously.

Plenty of people live as married couples, but never actually get around to it. All the disadvantages to co-habitation (potential loss of stuff with breakups), but none of the advantages of marriage (tax, inheritance, next of kin, automatic guardianship etc).

I guess what I'm trying to say, is that if you are the type of person who doesn't think about this kind of stuff to begin with, you are fairly unlikely to go about guardianship or wills and the rest of that rigmarole.

The Corinthian

Basically you're saying that if you're dumb, ignorant and/or lazy marriage is the way to go.

Almost as bad a reason to get married as "it'll make her happy".

Malari

The Corinthian wrote: »

Basically you're saying that if you're dumb, ignorant and/or lazy marriage is the way to go.

Almost as bad a reason to get married as "it'll make her happy".

Am I missing the point here, or why would you seek out a way to get the same result without marriage if marriage is the easiest way to go about it?

eviltwin

Inheritance tax was a main factor in us getting married when we did. We also had a young child. I think we would have married at some point anyway but the tax issue made us think sooner rather than later was the way to go. Of course we loved each other and wanted to spend our lives together but you don't know what tomorrow might bring and it seemed to us to be very foolhardy not to safeguard each other and our child when we were in it for the long haul anyway. No regrets.

The Corinthian

Malari wrote: »

Am I missing the point here, or why would you seek out a way to get the same result without marriage if marriage is the easiest way to go about it?

You're presuming that marriage is a desirable institution to be in, especially if you're a man, in the first place.

More correctly, if you want to get married, get married. If the only or biggest reason you're going to is to bypass bureaucracy, then you're probably making a big mistake.

The Corinthian

eviltwin wrote: »

Inheritance tax was a main factor in us getting married when we did. We also had a young child. I think we would have married at some point anyway but the tax issue made us think sooner rather than later was the way to go.

So really it wasn't so much why you got married, but at most affected when you got married.

That's fair enough - what's been confusing me is that some of the responses here have seemingly argued that this was the reason why.

Malari

The Corinthian wrote: »

You're presuming that marriage is a desirable institution to be in, especially if you're a man, in the first place.

More correctly, if you want to get married, get married. If the only or biggest reason you're going to is to bypass bureaucracy, then you're probably making a big mistake.

No, I'm not presuming anything, I'm just asking. I just don't understand why you think bypassing bureaucracy is a bad thing. In other words, what is a good reason to get married, in your view, already assuming two people love each other and are planning on spending their lives together.

The Corinthian

Malari wrote: »

No, I'm not presuming anything, I'm just asking. I just don't understand why you think bypassing bureaucracy is a bad thing. In other words, what is a good reason to get married, in your view, already assuming two people love each other and are planning on spending their lives together.

But then they've already decided to get married and bypassing the bureaucracy isn't the reason why. I already covered this in my last post.

Malari

The Corinthian wrote: »

But then they've already decided to get married and bypassing the bureaucracy isn't the reason why. I already covered this in my last post.

No you didn't, I'm saying just a couple living together, who haven't decided to get married. From what I gather you are saying they would be better taking a bit more effort to explore other, trickier routes instead of getting married?

pwurple

The Corinthian wrote: »

Basically you're saying that if you're dumb, ignorant and/or lazy marriage is the way to go.

Almost as bad a reason to get married as "it'll make her happy".

Eh, no. You have it backwards. Marriage is the way to go if you want to remain in the same long term relationship for the rest of your life. Not if you want to be single or change partners (obviously, I would have thought).

If you do intend to remain in that relationship, and not considering getting married, then you might be a bit thoughtless (dumb/ignorant is a bit harsh.. But Whatever way you want to word it). Exceptions apply for those who have done all the legal legwork separately, although my premise is that they are fairly rare.

pwurple

The Corinthian wrote: »

But then they've already decided to get married and bypassing the bureaucracy isn't the reason why. I already covered this in my last post.

No, they are just living together. There is a decision to be made to change from ambling along living together happily, to making it legal. People have outlined their reasons to make that decision.

Marriage is a legal contract, bureaucracy and legality comes into the decision.

The Corinthian

Malari wrote: »

No you didn't, I'm saying just a couple living together, who haven't decided to get married. From what I gather you are saying they would be better taking a bit more effort to explore other, trickier routes instead of getting married?

So are you suggesting that if marriage did not cut out this red tape, they would likely never get married? If so, it's probably one of the dumbest reasons I've heard of to get married in a long time.

pwurple wrote: »

Eh, no. You have it backwards. Marriage is the way to go if you want to remain in the same long term relationship for the rest of your life. Not if you want to be single or change partners (obviously, I would have thought).

Why is it the way to go if you want to remain in the same long term relationship for the rest of your life? Who's stopping you from doing so without getting married?

Malari

The Corinthian wrote: »

So are you suggesting that if marriage did not cut out this red tape, they would likely never get married? If so, it's probably one of the dumbest reasons I've heard of to get married in a long time.

No, you keep saying I'm suggesting stuff, and I'm not, I'm only asking you why you think the way you do. Two people love each other. They want to protect themselves against being taxed, life assurance, guardianship of children, etc. The easiest way to do this is to get married. Instead of going through all the red tape. You keep saying this is a dumb idea and I don't understand why. I don't have any particular strong views in this area, I just want to understand why it's so dumb. It seems pretty sensible, killing all birds with one stone, rather than go through all the red tape, no?

The Corinthian

Malari wrote: »

No, you keep saying I'm suggesting stuff, and I'm not, I'm only asking you why you think the way you do. Two people love each other. They want to protect themselves against being taxed, life assurance, guardianship of children, etc. The easiest way to do this is to get married.

It's still a stupid reason to get married though. You seem to be under the impression that all other things are equal when making such a decision, the reality is they're not.

Marriage is a serious commitment, a social contract that either party could break at any stage potentially leaving at least one of them financially devastated. Might not happen today, might not happen for ten or twenty years, but it might well happen.

So being in love alone is a dumb reason to go into such a commitment. Doing so to more easily bypass some red tape is another dumb reason. The real reason is (or should be) that you both love and genuinely and fully trust that it is for life.

Otherwise dealing with the red tape may be more complicated, but a lot less costly in the long term.

clairefontaine

Malari wrote: »

No, you keep saying I'm suggesting stuff, and I'm not, I'm only asking you why you think the way you do. Two people love each other. They want to protect themselves against being taxed, life assurance, guardianship of children, etc. The easiest way to do this is to get married. Instead of going through all the red tape. You keep saying this is a dumb idea and I don't understand why. I don't have any particular strong views in this area, I just want to understand why it's so dumb. It seems pretty sensible, killing all birds with one stone, rather than go through all the red tape, no?

I think some people do this to avoid the possibility of alimony and the expenses of divorce if all goes wrong.

It's an easier knot to untangle.

Malari

Ok, so you're actually saying that going through the bureaucracy can be a way of limiting the financial ruin you may face if married and the relationship broke down. That makes sense. You just kept reiterating 'marriage is dumb' without explaining why.

The Corinthian

Malari wrote: »

Ok, so you're actually saying that going through the bureaucracy can be a way of limiting the financial ruin you may face if married and the relationship broke down. That makes sense. You just kept reiterating 'marriage is dumb' without explaining why.

I never said 'marriage is dumb'. I said getting married just so as to avoid such bureaucracy is dumb; more correctly a dumb rationale. Just as getting married simply because 'it will make her happy' (as the OP said) is a dumb rationale.

So please focus on what I actually wrote. Not that marriage is dumb, not that one should not get married, but that given the seriousness of the commitment, doing so for such infantile reasons as avoiding red tape is pretty dumb.

Many have suggested that they did so for such reasons, and personally I'd prefer to think that they'd already decided to get married before. The alternative is not very flattering.

Is what I'm saying clear enough for you now?

Malari

LOL, yes it's clear! Like I said I don't have strong feelings about marriage one way or another, I was just trying to get you to explain your position.

I do think though, that even if you are in love, dedicated and believe you will be together forever and get married it can still break down. Maybe 20 years later. Would it not still be wiser for any couple to avoid marriage and go through the red tape instead (for the same benefits), in your view?

The Corinthian

Malari wrote: »

I do think though, that even if you are in love, dedicated and believe you will be together forever and get married it can still break down. Maybe 20 years later. Would it not still be wiser for any couple to avoid marriage and go through the red tape instead (for the same benefits), in your view?

Perhaps, perhaps not. Depends upon how confident the marriage will last the course, what weight on the perceived benefits of marriage (such the red tape avoidance) and, finally, their level of risk aversion.

But ultimately they get married because they want to get married, not because they want to avoid some red tape - that's at best the cherry on the top, but it would be frightening to think some might actually get married because of that.